Top 7 Energy Stocks to Own for 2017

Energy stocks have rebounded well off their lows as oil prices have recovered, but with investment strategists expecting higher oil prices in the years to come, energy stocks should continue to rebound.
 
Credit Suisse has put together a list of 140 "top ideas" covered by its analysts, using several parameters to weed out weaker companies and pick only the best ideas. Market caps, growth and valued companies, as well as a variety of different sectors were chosen.
 
As part of the investment process, each analyst ranked up to three stocks on a six and twelve month time horizon, only picking "high conviction ideas." Since not every analyst had three stocks that could make the list, they were allowed to pick less than three names.
 
TheStreet looked at some of the recommendations from analysts and broke it down even further, looking at seven of the best energy stocks from Credit Suisse's U.S. Focus List.
 
 

Nextera Energy Partners
Nextera Energy Partners

Name: Nextera Energy Partners

Market Cap: $1.76 billion

Recent Price: $32.55

Price Target: $40

Credit Suisse analyst Andrew Hughes thinks Nextera Energy Partners (NEP)  is the "premier vehicle to own, operate, and acquire long-term contracted renewable energy assets in order to pay a steady and growing dividend."

"The company has the lowest risk and longest duration growth outlook, which makes it best positioned among peers given a more uncertain U.S. renewable policy outlook and rising interest rates," Hughes wrote in a note to investors. "Our $33 Target Price reflects our view that NEP's growth prospects will appear as attractive in 2020 as they do today." 

Tesoro
Tesoro

Name: Tesoro

Market Cap: $9.3 billion

Recent Price: $80.04

Price Target: $110

Credit Suisse analyst Ed Westlake thinks Tesoro (TSO) has been working to improve its refining business and has other factors going for it that could give it nearly 35% upside from current levels.

"TSO has been assertively improving its refining business, diversifying/adding to logistics, looking to grow retail, and have now offered to acquire WNR in an all-stock deal," Westlake wrote. "Management expects the acquisition to be accretive to EPS by ~10-13%, with a large synergy of $350-435m. The expected synergy has been a lot to swallow for the market, as it represents ~33-44% of WNR's EBITDA (which is already a well-run company); implying that some of the synergies will come from efficiencies at TSO itself."

EQT Midstream Partners LP
EQT Midstream Partners LP

Name: EQT Midstream Partners LP

Market Cap: $6.2 billion

Recent Price: $76.51

Price Target: $110

Credit Suisse analyst John Edwards wrote that EQT Midstream Partners LP (EQM)  is the highest rated MLP in his coverage due to a number of factors.

"Primarily levered to infrastructure growth in the Marcellus shale play with long term, fee based contracts," Edwards wrote. "Distribution growth at EQM will be driven by it's ~$2Bn-plus organic project backlog in the most advantaged areas of the northeast, which are underpinned by long-term contracts." 

Pioneer Natural Resources
Pioneer Natural Resources

Name: Pioneer Natural Resources

Market Cap: $31.4 billion

Recent Price: $185.78

Price Target: $221

Credit Suisse analyst Ed Westlake wrote that Pioneer Natural Resources (PXD)  has good, visible growth for the next decade, something that's rare in the industry.

"PXD impressively laid out an operational goal baking in a 15%-plus total production CAGR through 2026, which implies ~1 MMboe/d of production by 2026," Westlake wrote to investors. "In addition, PXD management noted that vertical integration will be a major tailwind used to immunize the 10-15% service costs inflation expected broadly across the industry for 2017." 

Halliburton
Halliburton

Name: Halliburton

Market Cap: $42.9 billion

Recent Price: $49.36

Price Target: $60

Credit Suisse analyst James Wicklund wrote that Halliburton (HAL) is likely to benefit more than its competitors since the North American market is rebounding first.

"HAL's selective approach is clearly more positive than attempting to match revenues with rig count growth," Wicklund wrote. "Despite a somewhat disappointing Q4, HAL is the best-positioned large-cap stock to take advantage of the multi-year recovery."

Golar LNG Limited
Golar LNG Limited

Name: Golar LNG

Market Cap: $2.8 billion

Recent Price: $27.89

Price Target: $30

Credit Suisse analyst Gregory Lewis thinks Golar LNG (GLNG) is likely to benefit as liquid natural gas continues to be looked at as an energy source.

"GLNG has recently engaged in two partnerships, one with Schlumberger and another with Stonepeak, which should provide the capital and backing to allow the company to pursue its ambitions in the floating storage and regasification (FSRU) and floating liquefied natural gas (FLNG) markets," Lewis wrote to investors.

Energen Corporation
Energen Corporation

Name: Energen Corporation

Market Cap: $5.3 billion

Recent Price: $54.55

Price Target: $78

Credit Suisse analyst Mark Lear thinks Energen Corporation (EGN)  will outperform as commodity prices continue to improve.

"While EGN has baked in Gen 3.0 completions into the capital guidance, the company is only factoring in Gen 2.0 productivity on the production side," Lear wrote to investors. "Should initial Gen 3.0 results continue to translate into further productivity improvements, this would introduce additional upside."

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